As I do not have any accounting experience, please explain the principles and concepts for me in simple language. In order to assist our management team in the decision-making process, could you please make sure you reference any relevant sources relating to your advice, for example, AASBs, Corporations Act, and relevant websites? Issue 1 Shine Ltd incurred the following development costs in the last two years: Cost incurred $'000 Current year 2024 27,000 Prior year 2023 11,000 In the prior year, the criteria for capitalisation were not satisfied therefore accountants recorded the costs as expenses. However, in the current year the criteria were satisfied and Shine Ltd intends to capitalise development costs for 2024 as well as 2023. Please advise if all development costs can be capitalised in 2024. Issue 2 Shine Ltd owns a factory in Mudgee that manufactures rubber gloves. The factory is a cash-generating unit and the non-monetary assets of the factory include premises, various machinery and equipment. The assets are carried at depreciated historical cost. At the end of 2024, the carrying amount of the assets that make up the cashgenerating unit was $30,000,000. The factory was built on a leased land that has a remaining lease period of 10 years. Depreciation of the factory is on the straight-line method. At 30 June 2024, Shine Ltd tests the factory for impairment. Shine Ltd's accounting policy is to use the value in use to calculate its impairment loss. See below for value in use estimated as at 30 June 2024 & 2025. $'000 Carrying amount of the factory at 30 June 2024 30,000 Value in use estimated at 30 June 2024 Value in use estimated at 30 June 2025 23,130 25,086 Please advise how we need to account for impairment loss for the factory. Provide journal entries for the year ended 30/6/2024 and 30/6/2025. As you know, our accounting policy is to use value in use to determine impairment loss. Can you advise if this is the only way to calculate impairment loss? Issue 3 Shine Ltd would like to receive some recommendation on some cases regarding its liabilities. Please see below. 1) The ice cream factory located in Thailand has been incurring losses in the past 3 years. Management is contemplating the option of either to restructure the plant or to sell it to an external party. Management believes that losses will continue for another 2 years at about $30m per year before the business operation could turnaround. At year end, neither the restructuring plan nor the plan to sell was finalised. The carrying amount of the net assets of the plant at year end was $400m. Based on its current condition, the recoverable amount of the plant was estimated at $350m. 2) Shine Ltd operates profitably from a biscuit factory that has leased under an operating lease. Annual lease rentals totalled $120,000. During the year ended 30 June 2024, the company relocates its operations to a new factory. The lease on the old factory continues for the next 4 years (up to 30 June 2028), as it cannot be cancelled and the factory cannot be re-let to another user. The company current borrowing cost is 8% per annum. 3) On 30 June 2024, the Board of Directors of the company decided to close down the plant making chocolate products. On 20 June 2024, a detailed plan for closing down the plant was agreed by the Board; letters were sent to customers warning them to seek an alternative source of supply and redundancy notices were sent to the staff of the plant. The carrying amount of the net assets of the plant is $20m. The net proceeds from selling the individual assets and settling the liabilities is $12m. Other costs expected to be incurred are termination costs of $2m and directly attributable costs of closure estimated at $3m. The closure of the plant is expected to be completed by 25 August 2024. The company's year-end is 30 June. Explain, with reasons, whether the closure of the plant shall be recognised in the financial statements of 2024. Also, state the amount of provision, if any, which shall be recognised in its financial statements. Can you explain with reasons the accounting treatment that shall be accorded to the above cases (1) - (3)? Please provide journal entries where applicable. . I look forward to hearing from you shortly. Additional Requirements 1) You must include the following in your Statement of Advice (SoA): a) Cover Page should include: Name/logo of your accounting and consulting firm (you must make a logo) The words "Statement of Advice" Who the document is prepared by Who the document is prepared for Date Brief information on what the document is about b) Recommendations and explanations for each issue (must include in-text referencing) c) Reference list